Paul Merriman of Merriman Financial writes that if investors in their 20s learn the 10 lessons he lines out they will be a better investor than most people their parents’ age, ending up “with hundreds of thousands – maybe even millions – of extra dollars to spend”.

These lessons are not hard. They’re easy. My daughters, ages 14 and 11 respectively, have no trouble with them. I don’t think you will, either.

You will want to read the entire article and answer the simple questions after each lesson.

LESSON 1: Save vs. spend.

You can’t be a successful investor unless you’re an investor. And you can’t be an investor unless you have some money to invest. To do that, you have to save some money instead of spending every dollar. Is that so complicated? Yet you would be amazed at how many people just can’t seem to set money aside for the future.

LESSON 2: Save now vs. save later.

If you save $100 when you’re 25, at a growth rate of 10 percent your money will be worth $4,526 when you’re 66. That’s $45.26 for every dollar you save. If you wait until you’re 30, you’ll have $28.10 for every dollar you save. If you wait to age 40, your $1 will grow to only $10.83. Wait until you’re 50? Forget it: $4.18.

LESSON 3: Save more vs. save less.

I recommend you get in the habit of saving 10 percent of what you earn. Live on 90 percent, and you won’t suffer very much. If you need more spending money, get a second job. (You’ll have more to spend and less time to spend it.)

LESSON 4: Stocks vs. bonds.

Buy a stock and you’re an owner. Buy a bond and you’re a loaner. Which pays more, stocks or bonds? In the 75 years from 1931 through 2005, large U.S. stocks earned annualized returns of 10.5 percent. That meant that an investment of just $1 grew to $1,787. In the same 75 years, long-term U.S. government bonds earned returns of 5.5 percent. That meant an investment of $1 grew to $55.45.

LESSON 5: One stock vs. many stocks.

But more than 30 percent of the individual stocks you could have bought in 1996 are worth less today than they were then. If you bought a stock chosen at random and held it for 10 years, there’s three chances out of 10 you would have lost money.

By contrast, if you had invested in 1996 in a mutual fund that invested in U.S. stocks, there’s less than a 1 percent chance that fund would have lost money. This is why millionaires invest in lots of stocks. You can do that too, using mutual funds.

LESSON 6: Pay taxes vs. don’t pay taxes (legally, of course).

As soon as you start earning income that you have to report on a tax form to the IRS, you are eligible for one of the best tax breaks you will ever get from the federal government. It’s called a Roth IRA; the letters stand for Individual Retirement Account. You could think of it as your own private pension.

LESSON 7: Load funds vs. no-load funds.

When you invest in a load fund, you pay a sales commission. When you invest in a no-load fund, you pay no sales commission. Fund loads are complicated, partly because the fund industry wants them to be hard to understand.

LESSON 8: Low expenses vs. high expenses.

All mutual funds charge expenses, and investors who own a fund share common costs. But some funds charge a lot more than others. The expensive ones argue that you get more, but this is a case where the statistics indicate that the opposite is true. Every dollar you pay in expenses is a dollar of your investment return that goes to somebody else, not you.

LESSON 9: High tax efficiency vs. low tax efficiency.

This is a variation of Lesson 8. Recurring expenses act like an anchor being dragged behind a boat. The same is true of taxes. Some funds are tax-efficient because they don’t buy and sell their stocks very much, so they don’t create a lot of capital gains on which their shareholders have to pay taxes. Some funds are specifically managed to keep taxes low.

LESSON 10: Automatic vs. when you feel like it.

Put your investing on automatic pilot. You can put your savings on automatic by having money taken out of your paycheck or your bank account regularly so you don’t have to think about it.

He concludes that while these 10 lessons may seem very obvious, millions of adults don’t put them into practice.

To summarize:

Don’t spend everything you earn. Make your savings automatic, and start saving money as early as you can. Invest 10 percent of your pay in low-cost, tax-efficient no-load mutual funds that invest in stocks instead of bonds. To whatever extent you can, make your investments in a Roth IRA or a Roth 401(k).

Put all these lessons into practice and you won’t be sorry. That’s a promise.

Go and read the entire article.

Cool Photo of the Day

iamjosh captured quite a shot of a recent lightning storm.

I like how the lighting highlights the mountain in the background and lights up the ripples in the water.

© Used with permission

I still have a hard time believing people do this to their bodies, but now your car can have matching piercings!

More Photos

HatTip: A Welsh View

According to a story at the National Association of Realtors a landmark 96-year-old Upper East Side townhouse was leveled following a gas blast, allegedly set “by the owner during a tumultuous divorce”. What is amazing is that real estate appraisers now figure the property is worth more, not less, following the blast since a larger home can be built on the site and the site developers would not have to worry about historical landmark issues.

So, the guy blows up the property to spite his ex-wife, and finds himself not only going to jail but also his wife gets more money than she would have before. There is justice.

On August 21, 2006, the National Highway Transportation Safety Administration (NHTSA) passed a regulation requiring car makers to inform customers if the car contains an Event Data Recorder (EDR). According to Wikipedia

An Event Data Recorder or EDR, is a device installed in some automobiles used to record information related to accidents. These devices can be collected after a crash to help authorities determine what the vehicles were doing before, during, and after the accident. The term generally refers to a simple, tamper-proof, read-write memory device, similar to the black box found on airplanes, rather than the tape recorders and video cameras common in police vehicles and many commercial trucks.

Unlike airplane “black boxes”, voices are not recorded, but instead “speed, steering wheel movement, how hard the brakes are being pressed and the actual movement of the car itself.” If you have a newer vehicle it probably has an EDR. According to NHTSA, about 64 percent of 2005 vehicles were equipped with EDRs. You can use this is a list of vehicles equipped with crash data recorders to double check for model years 1994 through 2006.

In a report about EDRs, KOTV reports on a 19 year old who took his sister’s 2002 Trans-Am out for a test drive the day after she bought it.

He lost control and hit two utility poles; the crash killed his passenger, who was also 19. The driver had no idea the car would become a witness against him. Tulsa Police removed the black box from the wreckage and it had quite a story to tell.

The Trans Am’s computer read-out says five seconds before he hit the first pole, the driver was going 121 miles an hour, the throttle was at 100% and the RPM’s at 5504. At four seconds before impact, he took his foot off the gas and his speed dropped to 119. At three seconds, he hit the brakes and slowed to 108. At two seconds, he was down to 102 and one second later, just before he hit the first pole, he was going 87 miles an hour. Police sent that information to the DA, for a negligent homicide charge.

According to a CNNMoney article the new NHTSA rule requires that all EDRs record a uniform set of data and consumers must be told if their vehicle does contain a “black box”.

Data from the recorders is used by law enforcement and attorneys to recreate events directly leading up to an accident. Data is also used by car companies to research how cars and drivers perform in actual crashes.

Some privacy advocates have expressed concern that the data, which can be used as evidence in court cases, is being collected without the knowledge of vehicle owners and drivers.

The devices are virtually impossible to disable because their functioning is so tightly integrated with vehicle safety systems such as airbags and anti-lock brakes.

What do you think about being spied on by your own vehicle? Right now there are no guidelines about who can get this information or how they can use it. Your cell phone records are already admissible in court to be used against you if you cause an accident. Could an opposing lawyer use this to prove you never hit your breaks and therefore are partially responsible for the accident? Could a dealership refuse warranty work? An insurance company refuse coverage for a claim?

This is must one more facet of the debate over safety versus privacy. Will everything soon be recorded so that the truth will be known? Maybe a GPS implant in each of us that reports back to a central station? When a crime occurs they could just see who was in the area? We would be much safer from each other – but I think I fear Big Brother more than I fear you.

I saw this ‘poster’ after reading Matt’s Haikudos:

Year-end group meeting
Managers pontificate
Warm hugs all around

(alternate ending #1: “All is vanity”)
(alternate ending #2: “Bloody waste of time”)

By the way, you can create your own demotivational posters.

Cool Photo of the Day

couleewinds posted this great photo.

I really like the lighting, with the sun shining yet the storm in the background.
And the horse is looking straight at you…

© Used with permission

After seeing it posted on FatWallet, I just ordered a SimpleTech 160GB network drive from Buy.com for $79.95 (no tax & no shipping & -$10 for using Google checkout). The drive plugs into your local area network so all the machines at home can use it to store common data and to use as a backup drive as suggested by consumer reports:

Consumer Reports also tested drives that can back up several computers on a home network, using either an Ethernet or a wireless connection. Among network drives, Consumer Reports recommends the 250-gigabyte SimpleShare from SimpleTech for $300.

Well, 160-gig for $80 sounds pretty good to me. Especially since reading some reviews from a last year had this same drive priced at 3 or 4 times that amount.

Reviews:

• Review: SimpleTech SimpleShare Office Storage Server
• Simpleshare network drive almost a cross-platform panacea
• Overclockers Online
• PC Magazine: SimpleTech SimpleShare

Features:

• Store and share files over a network
• Easy setup with AutoDiscovery (no network experience required)
• Backup and protect PC or Mac files with Retrospect Express
• Expand storage capacity with additional USB drives
• Share printers over a network with built-in USB print server
• Fast Ethernet 10/100 LAN connection
• NASFinder software provides automatic drive mapping and simple configuration
• Compact, space-saving design
• FREE unlimited technical support

There is even a Tour that shows why everyone can use a shared network drive.

I will give an update after I receive the drive and put it through its paces.

I have a web form that gets e-mailed to me every time it is completed. I want to be able to manipulate the data that is sent to me into another format that another program can use.

I have an email that looks something like this:

==============
1. First=John
2. Last=Doe
3. EMail=JohnDoe@gmail.com
4. Phone=555-1212
...etc but more complicated...
==============

I need to convert it, merging it with some other text, to something like:

==============
gen_sFirst=John
gen_sLast=Doe
gen_sEmail=JohnDoe@gmail.com
gen_sPhone=555-1212
...etc but more complicated...
==============

I then also need to be able to pull that email address out to send a reply email.

I looked at a number of programs including:

• Process Them ($80)
• SpreadMsg ($0 to $389)
• Advanced EMail Parser ($299 – $599)
• Message Parse ($80)

All these programs can parse email and output the fields into other programs or to a comma delimited text file. What none of them seem to be able to do is allow me to create a ‘merged’ text file.

I then found EPGateway. ($15). EPGateway allows you access POP3 accounts to extract data from the message header or message text for use with other applications. Personalized auto responses can be created and sent based on the extracted text and on filtered conditions.

It can create and send a reply email “form letter” that can be personalized from data from the incoming email. And it can output a “merged” text file combining the extracted fields with user text just like I need.

What is strange is that I cannot get it to ‘find’ the message text! It outputs all the header variables but the message text and any data extracted from it is just blank. I have been in an email discussion with the support group and they sent me a ‘fixed’ exe file but that did not fix the problem.

Hopefully we will get it figured out so I can use this program. If I cannot get it to work I will have to find some way to automatically convert the email to a plain text file when it comes in and just write a perl script to process the text file. Then I will have to figure out how to generate the reply email.

Cool Photo of the Day

I am not sure I have seen any leaves changing color around my home yet, but Matt McGee definitely did here!

I really like how the red leaves stand out yet the purple leaves pull your eye.

You may think that miles-per-gallon is important but what you really are concerned with is miles-per-dollar. What does it cost you to get to work and back each day? What will it cost to drive to see your family across the state this weekend?

Now you can find out easily at the MP$ site. Sure, there are more costs to driving a car than just gas. There are things like insurance, maintenance, etc to consider but you will have to figure that out for yourself.

Our old 15 passenger van got 10 miles-per-gallon no matter what kind of driving you were doing. I finally figured out that the big engine in that thing burned the same amount of gas no matter if it was pulling a trailer up a hill or just sitting in the driveway idling. It was then that I realized that the real way to measure the fuel consumption was gallons-per-hour. I figured it burned 6 gallons per hour – which at $2.75 gallon would run me $16.50 per hour just for gas.

I just ran across the PodCacher (pun intended) that bills itself as “A family friendly, weekly audio show (podcast) all about Geocaching!”. I had listened to one of the first ones but forgot about it. Listening to it again, now on show #70, I am impressed.

Some podcasts that I have listened to get boring real quickly as the host just talks on and on, but the banter between the two hosts on PodCacher keeps it interesting and they are quite entertaining.

The subjects they cover span the gamut of geocaching topics including interviews of “notorious” geocachers, stories about geocaching both locally and on trips, geocaching tools, as well as tips and tricks to finding and hiding caches.

Earlier this week I was a deputy for the March of Dimes Jail & Bail. When people came to “serve their time” I would help them with the pledge sheets and cell phones that were available for their use.

It was the first time I have been involved and was quite interesting. People would ‘turn themselves in’ at the door and be taken by a real county deputy to stand before the ‘judge’ (local lawyers playing the part) who would ask them what their what they were willing to pay for bail.

After being ‘sentenced’ the ‘defendent’ would get their picture taken in a striped shirt standing in front of a height chart holding one of 4 plaques that said things like “Convicted of Kindness for Babies”.

They would then be taken into the ‘jail’ where they could call friends, relatives, and co-workers to raise ‘bail money’ so they could be released. Many were quite creative when calling, starting their conversations with statments such as

I am in jail and wondering if you could help me out.

Most seemed to have a good time raising funds for the March of Dimes although I am glad I was on the ‘outside’ of the bars working and not having to raise bail!

Finally getting the books out of storage. They were placed in boxes over 2 years ago when we were looking at remodelling the house. They have found a new home in the basement.

6 shelves filled. Many more to go…

Update: Matt did not move to a different hosting service which makes it even more strange that the RSS feeds coming from the 3 blogs all broke on both my wife’s and my feed. Guess it was just something with Newsgator.

Just figured out that Matt moved his server to another provider and this broke the RSS feeds for the blogs he is hosting at Pelennor Fields, including his, Mystie’s, and mine.

At least WordPress makes it easy to re-add them – the URL for a RSS feed is simply the blog address followed by ‘/feed’ and if you want comments then you can also grab that feed by adding ‘/comments/feed’ after the URL.

Now I have the 3 lost blogs back in Newsgator, my blog feed reader.

Just saw this image from Google Maps Sightseeing showing Iwo Jima’s Mt. Suribachi where the famous “Raising the Flag on Iwo Jima” photograph and which was the inspiration for the USMC War memorial in Washington DC.

Not only is it amazing that you can see actual people standing in front of the monument, but the shadow outlines the details of the monument that is not visible from overhead.

The October issue of Consumer Reports unveils the unethical practices of commercial data brokers. The magazine believes companies like Choice Point, LexisNexis and Acxiom are making billions of dollars for themselves at a very high cost to you.

Here’s what they’re selling:

• Your social security number
• your phone numbers
• your credit card numbers
• prescription medication information
• where you shop
• your political leaning
• even your sexual orientation

Even worse, Consumer Reports’ report says they are selling your sensitive information to anyone with cash and sometimes the anyone in that statement are criminals looking to cause you harm.

The story notes we are all at risk of losing our privacy, of having our ID compromised through identity theft and to have our credit harmed by being reported as deadbeats and security risks when we have done nothing wrong.

Consumer Reports’ conclusion: federal laws don’t do enough to protect you.

• There is no way for you to find out what these companies are telling others about you.
• The accuracy of what they sell is rarely verified.
• It is almost impossible to correct the errors in the information being sold.

After returning to camp from our hike up to Dege Peak we decided to see Silver Falls. You can walk from the Ohanapecosh Campground or park along Highway 123. The route from the campground is about a 3 mile loop, from the highway pullout it is less than half a mile. We decided that the shorter route was best for us. Afterwards we wondered if the level trail from the campground might have been easier on the legs that the relatively steep hike down from the highway.

The trail takes you to a log bridge that crosses the river chasm, giving a gorgeous view towards the falls. From there you can walk around to an overlook and watch the Ohanapecosh River get squeezed between rocks as it tumbles 75 feet over Silver Falls. During the spring the spray from the falls can get you wet from behind the protection of the trail barriers. The rocks were dry when we were visiting and so the boys went out on the rocks as did I to get some photos.

• More Silver Falls Photos
• All Mount Rainier Photos

Some friends had reservations for the Ohanapecosh campground at Mount Rainier National Park for the Labor Day weekend but were unable to make it and offered us their reservation. We wanted to go somewhere but had made no plans so this was a real blessing. After getting some stuff done at the office, we headed out Friday afternoon for the mountain. It took us about a 3 hours pulling the trailer to get to the campground.

After getting everything unhooked and dinner I took the Kids to the Ranger Program where they learned about the non-native plants that are ‘invading’ the park.

Saturday we visited the Sunrise Visitor Center and I took Kevin and Kyle on a hike up to Dege Peak while Von and Kirsten did the Nature Trail hike. The trail to Dege Peak starts at 6400′ and quickly climbs to the Sourdough Ridge Trail that follows the contour of the ridge for about a mile at around 6800′. A sign off the Sourdough Ridge Trail points to you to the last 0.3 miles and up the final climb to 7016’ and Dege Peak.

The hike was about 4.4 miles and took us about 2 hours to complete. Although the total elevation gain was 616’, the ups and downs along the ridge probably made the total round-trip ‘climb’ closer to 1000’.

• More Dege Peak Trial Photos
• All Mount Rainier Photos

Flickr has integrated geotagging features into their web site. The FlickrBlog gives the details of all the features and there is even a screencast showing how geotagging works in Flickr.

The easy way is to just open the new ‘map’ tab in the Flickr organizr and drop photos onto the map. They are promising some tools to move photos that have been geotagged using other methods including the unsightly “geotagged/geo:lat/geo:lon” tags.